Grand Keynote: Fred Luddy, co-founder and CJ Desai, CPO of ServiceNow | TiEcon 2020

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I would like to welcome Jeff Miller, President of Jam Ventures, to introduce the opening grand keynote. Here are a few words on Jeff. Jeff Miller is President of Jam Ventures, a business consulting company. Prior to establishing this firm, Jeff spent most of his career in operating companies. He was associated with Documentum Inc., ticker symbol DCTM, an enterprise document management software company, as a CEO and Chairman for a decade. He was instrumental in growing it from 15 employees into a publicly traded company with 1,200 employees and revenues over $200 million. Jeff has more than 45 years of high-tech experience in semiconductors, hardware, and software companies. He has held senior marketing and executive positions at Adaptec and Cadence Design System. Jeff was also a former venture partner with Redpoint Ventures, focused on mentoring CEOs of several Redpoint companies. Jeff has also been on the board of several tech companies and is currently a board member of ServiceNow. Jeff also serves on many philanthropic boards. Prominent ones are the Golden State Warriors Community Foundation, the Santa Clara University Board of Trustees, and the Miller Center for Social Entrepreneurship. By the way, he's a minority owner of the Golden State Warriors. Jeff has an MBA and a BS in Electrical Engineering and Computer Science from Santa Clara U. Over to you, Jeff, to introduce Fred and CJ.

Thank you, Kumar. I'm unmuted here. There we go. Good morning, ladies and gentlemen. As Kumar said, I'm Jeff Miller, the lead independent director for ServiceNow. It's my extreme pleasure to introduce Fred Luddy, our founder and chairman, and CJ Desai, our chief products officer. I've had the honor of being part of ServiceNow for almost 10 years and have watched it grow from $70 million in revenue to this year's guidance of over four and a half billion, and employees from 200 people, almost all in San Diego, to over 12,000 globally, while literally redefining the way our customers work. A remarkable run that is a very long way from being over. But a run like ours all starts with a determined founder. Fred Luddy, a world-class visionary, developer, and company founder who from day one focused himself and the company on keeping it simple and delighting the customer. But Fred is much more than just supremely talented. He also has the humility and self-awareness to know where he's not world-class. I met Fred in the fall of 2010, shortly after Sequoia invested in ServiceNow, when at Doug Leone's urging, Fred came up from San Diego to spend a day meeting with a series of experienced CEOs, starting with breakfast with me. At this point, Fred had run ServiceNow for seven years, had taken it from inception to that $70 million revenue run rate on an absurdly small amount of funding. Prior to Sequoia's hyper-growth-oriented investment, Fred had raised just one round of funding of $7.5 million and had only used $2.5 million to get the company to cash flow positive. So Fred and his team were certainly doing lots of things right, but a day of meeting with top-notch CEOs correctly convinced Fred that his company could do better with new, more experienced leadership. Not an easy conclusion for someone who was being very successful in growing his company, but rather an honest, insightful evaluation of what he personally wanted to do and was great at, which was developing products. I joined the board shortly thereafter, and together with Fred and Doug, helped hire Frank Slootman to be our first non-founder CEO. Frank was a phenomenal CEO who, with Fred as chief products officer, drove ServiceNow to a billion dollars in revenue by 2015. By late 2016, Fred had been running hard daily for 13 years and decided to retire from his operational job, but remained a board member. ServiceNow was fortunate enough to hire CJ to run all products. CJ has performed magnificently for us these past four years, deepening the power of our platform while also reacting very quickly when required, as he and the team did this year in developing, in literally a few short weeks, a set of COVID emergency response management apps and then lately a new set of Safe Workplace apps to help customers' employees return to work. But not even the most successful journey is without a few bumps along the way. When we were trying to attract CJ and get him to come to ServiceNow, one of the real reasons for his excitement was he wanted to work for Frank Slootman, because Frank really is—and was and is, by the way, Frank's about ready to take another company public now, Snowflake. He miserably failed retirement. That's a different story. But unknown to CJ at the time, because we're a public company, we have confidentiality requirements. Frank and the board had been working together for a long time, and Frank had been driving his own long-term succession plan. So in February 2017, barely six weeks after CJ joined, we announced Frank's retirement and that his successor was John Donahoe, former eBay CEO. Thankfully, CJ by this time was smitten by the energy at the company and developed a close relationship with John. Perhaps one trait that helped CJ handle what could have been a tough situation with great grace is his sense of humor. A little-known fact: in a previous life, our CJ was a stand-up comic. I don't think there are a lot of chief product officers that have a side gig as a stand-up comic. His jokes and his ability to make his team smile are well known at ServiceNow, although frankly, seeing how good an executive he is, my advice is don't quit your day job, CJ. You found your calling. It all started with Fred, so I'll close with a last Fred story. A year after John took over as CEO, Frank was transitioning off the board, and the expectation and the plan was to make John both CEO and chairman. But John attended Knowledge, our users conference, and saw Fred's keynote. What he saw was an outpouring of adulation and respect for Fred from both our customers and our employees. So he called me with a wild idea: instead of John being chairman, let's make Fred chairman and keep ServiceNow's startup energy going as long as possible. So with no further ado, ladies and gentlemen, our Energizer Bunny, Fred, and the man that runs all products, CJ Desai. Thank you very much.

As the world reopens, ServiceNow is helping customers make sure going back to the workplace works for everyone. Introducing the Safe Workplace apps and dashboard: four apps specifically designed to help ensure the health and safety of your workforce and workplace, all housed in a single dashboard to give you a comprehensive look into everything you need to know. And they're available now out of the box, powered by the Now Platform. Get a bird's eye view to make sure your employees are prepared and ready to go back to the workplace. Manage inventory levels across your organization thanks to workflows that automatically replenish supplies. Screen and verify the health of your employees and help manage workflows for cleaning, sanitation, and safe distancing for employees. Four essential apps, one comprehensive dashboard. Together we can make sure going back to the workplace can work for everyone. That's the power of the Now Platform.

It is a pleasure and honor for me to be speaking with Fred Luddy, our founder and chairman of the board. As Jeff stated, Fred retired from ServiceNow in 2016 in the management role as chief product officer, and I started in 2016. It has been an amazing ride in delivering for our customers. So we are going to have a little bit of fun. I'm going to ask the typical questions that are usually asked in this panel, and I'm going to ask some fun questions in between just to throw Fred off a little bit in terms of trying to make some humor here. So let's start first. Typically, Fred, these questions are asked at the end: what's your one advice or three advice for entrepreneurs? Given we have this amazing global audience, if you have to say one thing to all the entrepreneurs or want-to-be entrepreneurs, what would be that one thing and your one advice to them?

That makes a lot of sense. Fred, you know Jeff talked about ServiceNow. ServiceNow went IPO in 2012, and if you had invested a dollar in ServiceNow in 2012, the shareholders have now gotten a return of 2,100%. It has been an amazing ride, and we are just getting started. But Fred, you created a platform company, and for many entrepreneurs, especially in Silicon Valley, they idolize people who dropped out from Stanford or were a PhD student at some fancy college. Tell us about your beginnings. Where did you learn programming? Where did you work? Just give us some insight into how you got into programming.

That's amazing, Fred. I know that we still have the same ethos in ServiceNow: making sure that our end users are always happy. So I'm going to switch it a little bit on the trivia side. Talking about humble beginnings, from what I understand, you were also a tennis ball boy on clay courts in Indiana when you were in your teen years and have seen many amazing tennis players play. But I'm going to ask you, since the Indian community and South Asian community loves tennis: Vijay Amritraj or Leander Paes?

That's a great answer. So coming back to your journey, Fred, you talked about your humble beginnings in Indiana. When did you come to Silicon Valley, and what was it like?

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That's amazing. Fred, I know you spent a few years at Amdahl, but coming back to your true entrepreneurship journey in the sense of starting ServiceNow, I would love for you to share at what age you started ServiceNow and how you became broke at Peregrine Systems, and just share with us that whole story and what happened in 2004.

That's excellent. I do want the entrepreneurs to know that Fred still codes. He created a COVID-19 tracker early in April, was super excited to share with a few of us at ServiceNow the app, and he developed it on AWS using all the latest tools and services in Amazon. So even today, Fred keeps himself busy by making sure that he's still coding. Fred, related to starting ServiceNow, the concepts that everybody talks about today such as cloud computing, platform as a service, these concepts were not known. API-driven architectures in 2004. So what was the genesis like? How did you and the early team say, 'Hey, we are going to provide these services over cloud, ServiceNow over cloud, and ensure that we provide a true world-class enterprise platform where people can build applications'?

That's amazing. Now the concepts such as cloud computing as well as platform as a service have become ubiquitous, and this was done out of necessity, not only for a company to survive but for a company to scale. As we like to say, necessity is the mother of invention. So Fred, coming back to short questions: you started a platform company. ServiceNow still is a platform company, a digital platform company. When you look at the consumer industry, which platform company do you think is the most innovative for consumers: Tesla or Apple?

That's awesome. So Fred, we are currently in this global pandemic. You even wrote an app for it. Many entrepreneurs are dealing with challenges, and I remember reading about this in 2008: one of the VC firms sent out this note during the peak of the global financial crisis, and ServiceNow was only five years old at that time. Tell me, what did you tell the team when it was doom and gloom scenarios in the middle of the financial crisis? Because entrepreneurs today are facing the exact same thing. There are certain winners, certain losers, certain industries impacted by this crisis.

Exactly. And definitely you all survived and then went public in 2012. So Fred, one of the things that when I speak to entrepreneurs, ServiceNow has definitely acquired a few companies over time. We tend to do a lot of technology tuck-ins, and then entrepreneurs become part of our team with great energy. Some of the best team members we have were previous entrepreneurs. But one of the things that I know when you were going public in 2012 or just before you went public, you also got an offer to be acquired. When you think of TAM, valuation, how long you should keep going to scale the company, give us some perspectives on that. How did you turn down the 2011 offer?

That's excellent, and that's a great story because a lot of entrepreneurs face the decision: do I need to raise a round if I have a great offer and a great home? How do I make the decision? That decision making is definitely not an easy one: how to balance investors, customers, and your employees. So short question: streaming services, there are so many of them now. Which streaming service do you love: Netflix, Disney Plus, or any other?

That's great. So Fred, switching gears a little bit: you created ServiceNow, ServiceNow is having a great run, and we are just getting started as we always say with our teams. But you have done some wonderful things for Indiana University. As a South Asian community, we really put focus on education. You gave the second biggest gift to Indiana University: the Luddy School of Informatics, Computing and Engineering, as well as the Center for Artificial Intelligence. Why Indiana University, and why specifically those disciplines?

That's amazing, Fred, and that's so inspirational. When we get resumes for internships as well as fresh graduates from IU, sometimes your name is there with your school name or Luddy major. It's wonderful to see how many people's lives it is changing.

Exactly. So Fred, you are so humble. You are an inspiration to so many entrepreneurs around the world: where you started the journey just before you turned 50, how you survived the financial crisis, how the company went public in 2012, and how the company continues to grow to delight customers. I would say one thing: Fred has been awarded top 100 innovators by Forbes magazine, he was on the cover of Forbes magazine in 2018, ServiceNow was voted as the most innovative company, and all of that started with Fred Luddy in 2003. So Fred, thank you for spending time with us. Thank you for honoring TiEcon with your presence and knowledge. Namaste everyone, and back to you.